Higher shoe prices are giving consumers something to think about.
According to Matt Priest, president and chief executive officer at Footwear Distributors and Retailers of America (FRDA), said Thursday at a press briefing that “prices for footwear hit a record in September.” He noted that the shoe sector is about a $125 billion dollar industry at retail.
“Shoe stores are on a pace to have a great year for the decade,” he said. “But we are selling less product.”
And while the consumer appears to be willing to continue to open their purse strings, no one really knows when that could stop. Priest said that footwear prices are starting to get impacted by oil. As report, that’s because oil prices are impacting fuel costs for energy usage at the factory and in connection with freight costs. Added to that are high prices for rubber and synthetic materials, components that are core staples in sneaker production.
FDRA said this summer that shoe prices could see a five percent spike this year due in part to higher input costs. Shoe prices are already on the upswing and now there’s a chance consumers might have to pay even higher prices next year.
In fact, at Thursday’s call, Priest said contacts he’s spoke with in shoe production said “they’ve sold through now all of the componentry that was [bought before prices became elevated].” That means that fall 2027 product going into production now that will hit stores in late summer of 2027 will be when consumers will see higher elevated pricing, he said.
But consumers were already rethinking how they want to spend their hard-earned cash this past summer. To beat inflation, parents were focusing less on back-to-school promotions and more on footwear that can take their kids from one activity to another. DSW said that consumers this year were gravitating toward versatile, wearable styles that could work across a variety of school settings and activities. And Matt McCabe, executive vice president and chief merchandising officer at Academy Sports + Outdoors, told Footwear News that shoppers were looking for “footwear that can be multipurpose.” Parents are already wearing performance running shoes from one activity to another as they get their kids to school and practice, and then wearing the same shoes for when they train for road races and marathons. That mindset can translate to kids wearing their same favorite pairs to school and then to practice without needing to swap out their shoes, he said.
That’s the type of consumer behavior that could have shoe stores become more strategic about the types of shoes they sell and how many of those pairs to stock. And from a business standpoint, selling shoes at higher prices could bode well for margins provided they sell through inventory levels without having to do much discounting. That’s a key problem for shoe retailers when they are left with too many unsold pairs that need to be put on clearance to make room for the next selling season.
A survey from AlixPartners in partnership with FDRA from July found that shoe executives already are facing the conundrum on how to bridge the gap between cutting costs and meeting consumer demands for quality. And they’re aware that they can’t cheapen their products to absorb costs because then shoe brands would lose both the value argument and customer loyalty.
AlixPartner’s Bryan Eshelman noted that consumers would rather demand quality, even if it means buying few pairs, than buy lower-priced shoes.
The survey’s data points found that 53 percent said brand name drives purchases if trusted brands deliver on quality and durabiity, while 39 percent said they will cut pairs before switching to cheaper brands.